Despite the Federal Reserve’s decision to sit tight on interest rates yesterday and rising concerns about upside inflation risk in the mid-term, the broad market continues to act well on hopes of tariff de-escalation.
So far, those hopes are well-founded.
The market is reacting positively to this morning’s news of a trade agreement with the U.K. (not getting into details). The next big one will be the meeting with China that is set to take place over the weekend in Switzerland, which is well-known for being neutral ground.
This has all been good for many (but not all) stocks. Both the S&P 500 and Nasdaq are back above their pre-Liberation day level and close to crossing back above their 200-day moving average lines.
The small-cap indices are looking better as well but are just barely getting back to the pre-Liberation Day level. And the 200-day moving average line remains well above the S&P 600’s current level.
The messaging here is that there’s still plenty of recession risk here in the U.S., and heavy exposure to underperforming sectors, like energy, financials, health care and materials is contributing to somewhat lackluster small-cap sector performance.
If you want to play a small-cap ETF now, the best bets are the growth-oriented names. The two somewhat plain vanilla ones are Vanguard’s Small-Cap Growth ETF (VBK) and iShares’s S&P 600 Growth (IJT).
Or you can go with the individual names, which brings us to our portfolio.
Today’s update is centered on just a few stocks that have recent news, including Q1 earnings.
I’ll have another update tomorrow morning focused on companies that report tonight, which include FTAI Infrastructure (FIP), Natural Grocers (NGVC) and AvePoint (AVPT).
Recent Changes
None
Updates
Axogen (AXGN) is getting whacked today after the company slightly beat Q1 revenue expectations but missed on EPS. Revenue grew 17.4% to $48.6 million (beat by $300K) while EPS of -$0.02 missed by $0.03.
Management said the earnings miss was driven by one-time costs, mostly related to the anticipated BLA approval for Avance Nerve Graft ($2 million in costs) that will transition it to a biologic and which is expected in September 2025. The company is maintaining full-year revenue (+15% to 17%) and gross margin (73% to 75%) guidance.
The team also talked about various growth initiatives, all of which it says can be self-funded. These include expanding the sales team, a clinical pilot for the prostate segment, a protocol design for a Level 1 breast neurotization study, building clinical evidence for oral maxillofacial and head and neck and designing a study to compare Avance Nerve Graft vs. Autograft. Management expects to make meaningful progress on all these projects this year.
Separately, the company’s CFO is leaving to pursue other opportunities. That’s not a great look at any time (can imply opportunities at current company aren’t attractive enough to stay), though it is an opportunity for Axogen to bring in some fresh perspectives.
Regarding the stock, AXGN opened lower and has traded roughly flat for the last couple of hours. There may be an opportunity to average down here, but I want to see some evidence that the stock isn’t going to be dead money or slide further. Giving it a couple of days at current buy half rating. BUY HALF
Delcath (DCTH) stock is rallying (+19% late morning) after the company beat Q1 expectations, delivering revenue of $19.8 million (+530%), well ahead of $16.7 million consensus. GAAP EPS of $0.03 beat by a penny.
As expected, growth was driven by the commercial expansion of HEPZATO Kit, which generated revenue of $18 million (was just $2 million a year ago). This is the version that was approved in the U.S. The European version, CHEMOSAT, generated revenue of $1.8 million, up from $1.1 million a year ago. This is the version that’s mostly used for clinical research (until economics in Europe are more favorable to expand commercial sales).
Delcath received FDA clearance for a Phase 2 clinical trial of HEPZATO in liver-dominant metastatic breast cancer, an important part of the growth plan to expand indications beyond metastatic uveal melanoma.
The company added $16.2 million to its cash balance following the exercise of warrants on May 5. Given that it ended Q1 (i.e., March) with $58.9 million in cash (and no debt) and generated cash from operations of $2.2 million in the quarter, the company’s cash balance should begin to look better and better.
Bottom line, looks like a good quarter, and Delcath stock should continue to act well. The most quirky thing with this stock (like a lot of emerging MedTech names) is the ramp-up in new centers, which can be lumpy.
On the conference call, management said it added three new centers in Q1 as well as two more in April and May, bringing the total up to 19. A total of 10 more are accepting referrals. Sounds like this pace is better than expected, which implies revenue growth could exceed expectations near term. But there’s no guarantee centers will continue to come on board at the same pace. Will see how the stock acts in the coming days before changing from buy half. BUY HALF
Hannan Metals (HANNF, HAN.CA) is our newest name and is roughly flat compared to a week ago. The only significant news is that one of the founding members, Lars Dahlenborg, will step down from his role as president and will transition to a senior consultant role for the next six months. The company doesn’t have immediate plans to fill the president role and remains focused on drill programs in Peru.
I’ve been pleased to see that our buying pressure with this somewhat illiquid stock has not driven a surge in shares of HANNF.
Hannan is an exploration-stage company pursuing large gold, silver and copper targets in Peru and Chile. It’s sizeable land position in Peru includes the Valiente and San Martin JV projects. Potential for drilling in these areas, which should have just started in May, is the driver of most of the current excitement around the stock.
Most of the exploration work at Valiente has been done at the Belen prospect, which includes the Vista Alegre, Ricardo Herrera and Sortilegio targets. The plan is for drilling to begin any day, first at Vista Alegre (gold, 12 drill platforms), then at Ricardo Herrara (copper-gold, 14 drill platforms) and Sortilegio (copper-gold, 13 drill platforms).
The results of these drill programs should move the stock in the coming months, hopefully significantly higher. BUY
Currently Open
| Ticker | Stock Name | Date Bought | Price Bought | 5/8/25 | Profit | Rating |
| AORT | Artivion | 6/5/24 | 23.3 | 29 | 24% | Buy |
| AVPT | AvePoint | 9/5/24 | 11.6 | 17.6 | 52% | Hold |
| AXGN | Axogen | 3/5/25 | 17.8 | 13.8 | -22% | Buy Half |
| DCTH | Delcath Systems | 2/6/25 | 16.3 | 14.4 | -12% | Buy Half |
| ENVX | Enovix | 10/6/22 | 20.4 | 6.6 | -68% | Hold |
| FIP | FTAI Infrastructure | 8/1/24 | 10.2 | 4.8 | -53% | Hold |
| HANNF | Hannan Metals | 5/1/25 | 1 | 1 | -5% | Buy |
| NGVC | Natural Grocers | 4/3/25 | 40.4 | 46.8 | 16% | Buy Half |
| PPTA | Perpetua Resources | 12/4/24 | 10.7 | 14.6 | 37% | Buy Half |
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